On Friday the government issued a document outlining how it expected Registered Childcare settings to claim support during the Coronavirus pandemic. This included a major change in previously published policy, by adding a number of restrictions to claims where settings were in receipt of Early Years Free Entitlement funding.
Both the timing and content of this document have sent waves of panic and anger throughout the .sector. For a minority the new measures may not have a serious impact, but for the majority they will will be potentially devastating and could lead to significant numbers of redundancies and closures.
The document continues to be interpreted and misinterpreted across Social Media, with some believing it to be fair and others an insult. There is little clarity on how to calculate what can actually be claimed, and the example given in the document is of little help in this. For example, it does not make clear if 100% of the private element of the paybill can be offset against the furlough claim or only 80%, and many, I believe erroneously, think that they can simply allocate this money against the total furlough bill, rather than against the individual salaries of each person furloughed. The example also fails to explain how NI and pensions contributions are to be dealt with such as if they must be included as part of the private income 'pot' or can be paid on top of this. It appears we must wait for the promised calculation tool for clarity on this. I would suggest a policy of 'watch and wait' in the interim. Don't hit that claim submission button on Monday morning when the portal opens as new guidance may be forthcoming, especially given the level of lobbying that has ensued.
The suggestion that receiving both funding and furlough monies is tantamount to fraud, and will lead to settings making a profit out of the current crisis has been touted, and angrily refuted. Some settings, especially those currently closed, and those whose primary income is FE may, on the face of it, appear to be making a profit but I do not believe that they are profiteering, as implied. Income now is not just for now - it is to see those settings through until Christmas, so profits that would normally be made in the summer term create reserves to ensure the ongoing survival of the business. We are not party to their financial position or know what other income streams they have lost through closure, such as parent fundraising. We don't know how much rent they are being charged and what other debts they may have. The reality is that there are many, many variables and we all operate differently so cannot and must not judge others based on our own experiences or business operations.
Let us stop speculating on who stands to make what out of this saga. I think the mud-slinging must stop and we should pull together - a united front, a united sector. #4thEmergencyService
This is the letter I have sent to my MP using the Early Years Alliance template https://www.eyalliance.org.uk/take-action-government-u-turn-funding-and-furloughing?fbclid=IwAR2dhcTK8JF8UgfOMh1anF8AKGzIuNpI92Xk6uGWG1kx5tvUpw04v-1-X6I
Please feel free to copy or write your own.
Re: Government U-turn on how childcare providers are able to benefit from the Coronavirus Job Retention Scheme (CJRS)
I am a Childminder & Early Years Trainer/Consultant at Children at Heart. I am one of those Childminders who has taken the very difficult decision to close my setting, having no eligible children in my care, and vulnerable people in my household. However I continue to support my minded children through regular online contact, and in my role as a trainer and consultant, am supporting many colleagues across the childcare sector, both open and closed.
Registered childcarers provide a vital service supporting parents and carers to work or cope with lockdown while providing a high quality early education for the children in their care.
Department for Education guidance which has been in place since 24 March 2020 explicitly stated that: "The Coronavirus Job Retention Scheme means that for employees who are not working but kept on payroll, the government will contribute 80% of each worker’s wages of up to £2,500, backdated to 1 March 2020. Settings can access this scheme while continuing to be paid the early entitlements funding via local authorities."
This gave a clear assurance that nurseries, pre-schools and childminders with assistants could benefit from both schemes.
However, under new guidance ('Coronavirus (COVID-19): financial support for education, early years and children’s social care') released on 17 April 2020, the government is now placing new limits on the level of support childcare providers in receipt of 'free entitlement' funding can benefit from. This change has been made at the last minute when many providers have already budgeted and planned, and in some cases, furloughed staff.
The early years sector was already struggling financially before the coronavirus crisis. This removal of the support that has been promised for weeks could mean mass redundancies and setting closures.
I have serious concerns regarding the guidance, 'Coronavirus (COVID-19): financial support for education, early years and children’s social care', published on Friday.
First of all, I am appalled at the timing of its release: on a Friday evening when all departments are closed, with a whole weekend of speculation and no support. Not just this, but on the Friday evening immediately prior to the opening of the CJRS portal, on Monday 20th April. Setting managers, who had already placed staff on furlough, following existing guidance, will have calculated their claims, ready to submit, but are now in the position of not only having to recalculate, but also reconsider whether staff are still eligible to be furloughed, and if not, face the fact that they may have to make them redundant after all.
The reference to a calculation tool being developed is not at all helpful: it is needed now, not at some nebulous point in the future.
It is grossly unfair to place this burden on the sector at such short notice, weeks after having made assurances that childcare settings could access the CJRS whilst continuing to receive FE funding, with no reference to caveats or restrictive conditions. Settings will have negotiated terms with staff, including topping up their furlough pay to 100%, and may not now be able to honour this.
I strongly believe that this situation should never have arisen in the first place. The CJRS guidance document does state that organisations in receipt of public funding TO PAY STAFF should not utilise the option to furlough staff. However, Early Years Free Entitlement (FE) funding is not, and never has been, a payment for staff wages. FE funding is not index linked and has never risen in line with increases to National Minimum Wage. The funding is there to provide eligible children with Early Years education and childcare - it covers ALL associated costs in delivering this service, such as accommodation, resources, legal responsibilities (insurance, registration fees etc), training costs, food etc. as well as staff costs. The clause within the CJRS guidance should not therefore apply to the PVI childcare sector at all.
This does not even take into account the fact that the FE falls way short of the actual costs involved in delivering a funded childcare place. In my own setting there is a shortfall of 48p per hour between what I receive and my costs. This represents a loss of over £1600 for the children as a Childminder I am able to care for - scale this up to a preschool or day nursery and this figure is even more significant.
In addition, it is completely impossible to separate out which staff deliver funded care and which are paid for by fees, as staff typically work with all children in a setting - even those in baby rooms often cover in other areas for breaks, holiday and illness - and many children access a mix of funded and paid for care.
There are numerous issues linked to the 'Coronavirus (COVID-19): financial support for education, early years and children’s social care' guidance:
Different Local Authorities have different mechanisms for paying funding - some pay monthly, some termly, some like West Sussex pay a percentage at the beginning of term, and the balance after half term. Some are continuing to pass on the full funding to all settings, closed or open. Others have reduced payments to closed settings and increased them or made gratia payments to open settings. Some have said settings may retain funding if a child attends elsewhere and are then also paying the new setting, whilst others are advising the new setting to offset the child against funding received for a non-attending child. Some LAs are saying that the old setting must transfer funding to the new setting. There is no consistency.
Some settings are term time only so the funding only relates to the 38 weeks they are open. This also applies to any private income, which makes using February problematic, given that this month includes half term. It is also an issue for settings that are open all year but do not stretch their funding.
Some settings, open all year, stretch their funding to include holidays. Some invoice fee paying parents monthly, some termly or half-termly. Some invoice in arrears for actual hours used, some in advance for booked hours. This impacts on February as the fees paid may therefore be for 3 weeks of February or 4 of January, not even taking into account the fact that February is a short month and that some months are 5 weeks. Some annualise fees so parents pay the same on each invoice. Some settings are still receiving private fees; as retainers or voluntary payments, but many are not. A few are eligible for the Small Business Grant but many are not. Few can get loans as they cannot demonstrate their business will be sustainable and viable in the future. The playing field is not even, and with the exception of a few larger chains, very few settings will have reserves to cover their losses during this time, especially as they will be relying on profits from spring and summer terms to see them through the leanness of July and August when income drops and gradually builds from the autumn term to January.
Some settings employ staff on term time only contracts, others on zero hours or as bank staff. Others annualise term time wages to provide a regular monthly income.
All of these many variables make basing any calculations on a single month unworkable, and unfair.
The document also states that any future calculations must take into account any changes in the level of FE received but must not be adjusted for any private income changes. This is profoundly unfair as it will seriously impact on the level of support a setting can access.
I am not a manager, accountant or HR trained but I know there will be those who are who will be able to argue the care far more eloquently than I , and provide exemplar figures to illustrate the seriousness of this situation. What I do know however, is that many, many of my colleagues are putting their own health and that of their families at significant risk by caring for children of front line workers, in the case of childminders doing this in their own homes, in order that those workers can do their jobs. Registered Childcarers are the 4th Emergency Service. Our sector is not looking to make a profit out of this crisis, and it is frankly insulting that this has even been suggested. We are simply trying to survive so that come the end of lockdown when parents are returning to work there is still a sector out there to provide childcare to enable them to do this.
Will you speak on my behalf and raise these concerns to the Treasury as a matter of urgency?
For many childminders who have had to take the difficult decision to close their doors during the coronavirus pandemic it has been a huge wrench to not see their minded children every day.
We naturally become very close to our minded children, with them often becoming akin to a second family, so this is hardly surprising. It is difficult for the children too. Many will be too young to understand why they can’t visit any more and may be worried they are no longer cared about by their childminder.
In my first blog I mentioned some ways in which childminders and their mindies can stay in touch with their families that will benefit everyone. I have updated this to take into account the significant changes that have occurred since that was written, not least the ‘lockdown’ situation we are currently in.
Issues around money bring out the best and worst in people.
Over the past few weeks, I have encountered numerous acts of altruism and generosity: people with very little, giving what little they have; people with £millions giving millions. I have also heard many stories of selfishness and pain: people lacking sympathy and consideration for others and putting themselves first at all cost. Most of us live somewhere in the middle of this though.
There is no doubt that the national emergency ensuing as a result of COVID-19 is causing enormous financial hardship to many and putting huge economic pressure on businesses both large and small. The various forums I belong to are strewn with stories of childminders, nurseries and preschools struggling to survive, with questions regarding how to deal with issues such as parents paying fees or retainers, furloughing staff and claiming benefits.
I am not an accountant, financial or legal expert. I’m not a business manager, although in a time years ago I was a retail manager with a team of staff. I am a childminder, as well as being a trainer, though and I am also in the position of supporting other childminders through my training and mentoring. I have taken time to consult with fellow trainers and to read the various government guidance documents. I’ve even attempted to decipher the relevant sections of the new Coronavirus Act 2020 which received royal assent and became law on 25th March.
I want to offer my own take on the money situation and hopefully provide a useful perspective. These responses are aimed specifically at registered Childminders, but the principles will apply to group settings as well.
If you have further questions that you would like me to attempt, do email me: email@example.com
What should I be charging parents whilst I am closed and cannot have their children?
This is the biggie! There is no clear answer I am afraid.
Your first port of call should be your contract with the parent. What does this say about charging during closure? Have you covered this scenario in it? I have seen it said that all contracts are null as a result of the pandemic, but I am not convinced this is true. This is something you would need to seek legal advice on if you are concerned.
However, in my opinion, you cannot insist a parent pays fees whilst you are closed and not offering a service, unless you have this provision already in your contract, remembering that you are not closed due to holiday and may not be due to illness, so it is unlikely you would have the relevant clause in there. You can give notice to terminate the existing contract (assuming you believe it to still be valid) and offer an amended version with this clause, but parents could just say no and go elsewhere.
There are a number of options for charging: including requesting full fees; partial fees; or no fees during closure. All present problems of different kinds. For me it is about balancing what is fair and reasonable against what is necessary and appropriate. You will need to examine your own situation and that of your families to decide.
How can I survive financially if I’m not charging parents?
The Government have started to put support plans in place (see below) and there are other ways we can save money.
What financial help can I get from the Government?
I have seen a lot of people complaining about the Government support package for the self-employed (see below for details of the offer). My first thought was, what an ungrateful lot we are – before this announcement we were being offered nothing and were entitled to very little beyond possibly Universal Credit. Surely, something is better than nothing? It is actually a very generous package considering, though I accept there ARE limitations and it is obviously disappointing for those in their first year of trading. I think that this had to be created in a very short space of time, hence the flaws and lack of full information.
I have tried to respond to some of the questions and comments I have seen:
Below are the links to the official documents. Please read them carefully and sign up on the .Gov website for updates, which are frequent and usually hit inboxes late in the evening. This is a lot safer than asking questions on Facebook, where you are guaranteed to get multiple, conflicting responses. I have included the key points from these documents below the relevant link.
What additional business support is available to childcare settings during this period of disruption?
Furlough = Placing employees on an extended leave rather than making them redundant
My name is Rebecca.